Car buying tips?

[alarimer]

I have decided to buy a new car or at least I am thinking about it seriously. The old truck is getting a little long in the tooth, and I want to sell/trade it while it still has some value. My question is: how do I negotiate effectively? I am really not good at this and am pretty sure I got ripped off the last time (although the vehicle was cheap enough it didn't matter that much). Every time I have bought a car I have not dickered on the price. Well once I bought a Saturn so there was no haggling there. So I have no experience at this. I have read some columns at Cars.com which should be useful.

I have to decide between two vehicles first. Sporty or practical is what it comes down to I think. At this point either a Mazda 3 hatchback (love the styling of it) or the more practical, somewhat staid Saturn Vue (although it seemed like it would be fun to drive, as long as I remember that, like all SUVs it has the potential to roll over). So I am weighing the pros and cons and keeping in mind that whatever vehicle I choose has to be able to transport a kayak on top of it. So no convertibles for me.

So I am not in any hurry. I want to take my time and not feel pressured or rushed to make a decision. The Mazda3s are kind of hard to find- they don't have many at the local dealer so I may look in a larger city. Saturn has plenty of Vues (and they have incentives like cash back or something while Mazda does not, at least right now).

[Aristus]

1. First of all, don't fall in love with the car you want. Be prepared to

walk away if you don't like the deal. Believe me, they won't let you leave until you've bought the car. Only buy it when YOU are happy with the deal.

Next, some people think being a tough negotiator means being a rude jerk. It doesn't. Be polite, be friendly, and be firm. Kill them with politeness. If you're a jerk, they'll overprice you just to get rid of you.

Also, if you're buying new, ask for a certain amount over invoice; $500-$600 is a good range. If they see that that is what you are prepared to pay, they may fast-track the deal. There are good reasons for this. The salesperson will get a car up on the board. The commission will be a "mini", but he'll get $100 or so for maybe 15 minutes work. Then he can go right back out on the lot and snag the buyer who will pay full price. Plus, the dealership will get a no-hassle point toward their volume bonus, which is almost certainly more than they'd get for the car sold at full-price.

They will show you the invoice before the deal is closed; they are required to by federal law, but they will probably act like they're doing you a big favor. There is no "other invoice". If they tried to snowjob you, they'd lose their franchise so fast it'd make your head spin.

Don't even mention 'trade-in' until the deal is closed. They will never give you a good deal on it, so make sure the purchase is in the bag before you talk about trading in your old wheels.

Leave yourself an "out" to make them sweat. If they aren't giving you the deal you want, continue to act interested, and announce that you are "going to lunch" (or whatever) "to think about it. I'll get back to you." They know that if they let you off the lot, that you are probably never coming back. They will start to give you the deal you want right about then.

There are a few tips for you. Hope they help.

[alarimer]

5. I think I have already made a mistake

in talking about trading in my truck. I won't take less than $4000 for it. Blue Book wholesale is around $5000. I think I can be firm there because I can always sell it myself. I might try to do that first. It would mean no wheels for a few days if I managed to sell it but I need the money for a down payment.

[gr8dane_daddy]

2. Go to Edmunds.com

They have a lot of good info to help you plan a purchase. A few tips I can give you:

1. First go on a cloudy day during the week when buyers are not likely to be visiting and they're looking for any buyers.

2. Try to go about 45 mins before closing time and keep the salesman (and his manager) there past closing time. They are not going to ask you to leave and they certainly want to get something for their time they are staying over to accomodate you.

3. Remember the sticker prices are typically 15-20% over invoice. Edmunds suggest that 3-5% over invoice is a fair price. You're there to get a vehicle while allowing the salesman to make a living, not finance his next vacation.

4. Dealers have some type of deal with the manufacturers who give them a three month rent or due for the bank to hold up the dealership until they can sell their vehicles. If they sell it within three months, they keep the difference which gives them incentive to sell their vehicles off as quickly as possible. After three months, the dealership starts to eat the cost of keeping the vehicle on site. They won't tell you about this but you can remind them of the extra cash they could be making if they don't sell the vehicle at what your offering. Check out Edmunds for this little unknown benefit for the dealership.

5. If they don't want to negotiate for lower prices, ask for concessions such as upgrades on stereo systems, bigger engines, better tint jobs, etc. I got a towing package, larger engine, and 6 CD disc changer thrown in when I threatened to leave.

6. Take an Edmunds book in there with you. When the dealers see you have one, they know you've been doing your homework and will less likely try to pull a fast one on you.

Have fun and plan to do some homework.

[IcyPeas]

3. If you like the Mazda 3 (as I do)

also look up Nissan Versa Hatchback (coming out any day now) and the Honda Fit which is a hatchback. I am thinking about one of those 2 and before they came out I was looking at the Mazda3 (I have a 91 Mazda Hatchback now that's been a fine car in it's 140,000 mile life) Mazda3's not the only one out there like that. I'm not sure about the Kayak fitting though, but check it out (the Versa it a little longer/bigger). Good luck.

[alarimer]

4. I haven't seen those yet, just pictures

In comparing specs, it looks like the Versa has a smaller engine. Better for fuel economy though. I do want to see one so I am waiting at least a few weeks until the dealer gets some. I had gone to the Nissan place to look at the new Frontiers but they are HUGE. Well, compared to what they were anyway.

[AlCzervik]

6. i bought my last car via the internet, after much looking i decided

on what car and then i contacted 3 Honda dealers with the exact specs. i wanted and then i waited. Within 1 hour all 3 had contacted me with prices and i went back and forth and then finally chose the dealer i would buy from, the only caveat was that when i went to the dealer i could only talk to the internet sales person or else the deal would be voided----no problem. I went to the dealer, did the paperwork and within 2 hours i was driving home with my new car.

Another tip, if you can wait till at least August then do so, car dealers get a lot of the new model year cars in during the late summer so they'll want to get rid of their 06 models.

[never cry wolf]

7. Go to Consumer's Reports online

It's only $26 for a year, they used to have a $5/month fee too. They can give you the wholesale price, list price, manufacturer's price, etc. They also have a whole large section on how to buy a new car. I read the whole thing and decided to buy online through one of the many free car brokering services. Simply put, you enter the make, model and options you want and they send it to local dealers who then essentially bid for your business. They know they are in competition so they give you their best price. I got a great price on a honda civic but it was at a dealer 20 miles away. I called the one closest to me who was $300 higher and they agreed to the lower price. The first time I saw a salesperson in person was when I came in to sign the papers & pick up the car. No haggling, no games... I'll never buy a new car in person again.

Again, CS can walk ya theu the entire process and let ya know what prices are a good deal. For $26 you can't go wrong.

http://www.consumerreports.org/cro/index.htm

[alarimer]

21. I will probably do that

thanks

[Magrittes Pipe]

8. Three things:

1) Look at the used lot. If you buy a new car, the SECOND you sign the papers and drive it off the lot, it's just depreciated by about 20%. Consider buying a 2005 or even 2006 that was used as a company car or demo. It'll be a couple grand less, and it will also be worth just as much tomorrow as it is today.

2) If you really want to buy new, research Edmunds.com. Find out invoice pricing, and make a firm commitment to yourself that you will only pay $100 or $200 over. This does NOT cut into the dealership's profit margins, as what they actually paid for the car is not what is on the invoice. There are always hidden dealer incentives from the manufacturer. The dealership is interested in making the sale first and foremost, they're only interested in hosing you as a secondary thing.

3) ALWAYS ALWAYS ALWAYS demand to see your interest rate when you're in the finance office. They are legally obligated to show you what you're paying, and it is NOT always what you think you're paying. They will pull your credit, make sure you get a copy of your credit report. Find out how they arrived at the numbers. If you have a 760 credit score there is no reason in hell you should be paying 10% interest, but some people do. The finance manager will put you through at a higher interest rate than you deserve. ALWAYS. You need to see that rate and make it clear that it needs to be lower.*


*Realistically, of course. Don't expect sub-prime rates (unless it's a manufacturer's promotion), and if your credit's shitty (like mine is now), don't expect a low rate at all.

[sbj405]

9. If you don't like negotiating, you can use car buying service

Costco has one, as do some banks. Once you decide on the specs of the vehicle, they do the haggling. I have no experience with this, so I can't speak to whether it's a good deal. I brought a fake husband with me last time I bought a car. :-)

[ohiosmith]

10. Costco is a good idea. I used them a few months ago when I bought

my wife a new CRV. You go to the Costco preferred dealer and they will give you a firm price on the vehicle of your choice. I went a step further and took the quote to a competing dealer. The competing dealer not only met the quote but threw in a ton of extras. Bottom line, the original invoice price of the car was $27K I paid $21.5.

[alarimer]

22. We don't have Costco here

I am not sure where the closest one is. But that sounds like a good idea.

[Deep13]

11. Haggling gets you the best price.

Plan to buy on the last day of the month and in winter.

Remember, the deal is up to you, not the dealer. The absolute worst thing for them is to see you leaving.

Going to ask the manager is a ploy to get you worried and defensive. Talk to your SO, make jokes, and rifle through the stuff on his desk instead.

Do not mention trade-ins, special promotions, cash discounts etc. until after you get the rock-bottom price.

Do not pay for transportation costs. Assume the only reason it is there is to be negotiated away.

Make it clear that you are in no hurry and that your old car works fine. If they ask you about your old car, decline to answer. Too early to discuss trade-in. In fact, park a block away.

[SoCalDem]

12. We always buy a well cared for used one..preferably a Honda/Toyota

pay cash...check insurance rates BEFORE you choose the car..and then drive as little as possible (saves gas)

Seriously though, enjoy your new car... (only ever had TWO of those in my lifetime)

[Phx_Dem]

14. using cash--not a good idea

When the dealer thinks you are going to finance with them they are much more likely to allow a lower sales price, because they can make up the difference with the interest on the loan.The loan can be payed off immediately. On one occasion, I used Toyota credit, refinanced right away with a FSB cost me $80 to refi, added plus is that you get credit (on your credit reports) for paying off a loan.

[SoCalDem]

15. We don;t TELL them we're paying cash until we know we've got a good deal

and we're buying used ones (cheaper..:)..) too:)

[Deep13]

17. My understanding is ...

...auto dealers don't hold loans on used cars, they discount them to a finance company.

[Phx_Dem]

18. I was thinking more about a new car purchase

but some used car cos. do not sell their loans.

[alarimer]

24. My last loan on a used Nissan

came from Nissan Motor Acceptance Corp. I guess it's their finance company but I am not sure.

[alarimer]

23. I am not sure it is going to be new or just "new to me"

My last two vehicles have been used, both two years old at the time I bought them. I never had a problem as they still had at least a year warranty left. I would probably only buy a "certified" used car from a dealer, not from an individual.

[Phx_Dem]

13. IGNORE THE INVOICE

They want to show it to you fine, take 10-20% off their invoice and make a offer. Do not let the salesman negotiate with you based on monthly payment, very good way to get screwed. Let them know from the beginning that you want to finance with them, whether you want to or not. Do not involve a trade-in vehicle, sell it yourself.

If you are going to lease, read up on it first, it's more complicated than a purchase. You can negotiate the cap price, dep. price and interest (yes there is interest on a lease, it's called the "money factor" to figure out the APR multiply the money factor by 24).

[Deep13]

19. Good stuff.

Also, negotiate up from your rock-bottom offer, not down from the sticker price.

[Phx_Dem]

20. good point

that's exactly what I do. Buying a car is a bitch, but I try to stay friendly when dealing with the sales people. They tend to freak out when you offer less then their so called invoice, but they know damn well that it's BS.

One other thing to mention is that it is VERY worthwhile to bring a graphing calculator (like the TI-82) so you can do amortizations on the fly, the salespeople are not going to play games with the price/payment when they know you have the ability to amortize.

edit: if you don't have a graphing calc or access to one you can download a spreadsheet from MS that does amortizations. Can be used on a notebook comp. etc. It's in the MS template library.


My last two purchases (new)

97 Corolla sticker 17.7K paid 13.5
03 Tundra sticker 22.5K paid 17.7K

[alarimer]

25. The problem with selling it myself is the hassle

I have to sell it first to have money for a down payment, which leaves me for a while without a vehicle at all. Since I live alone, I would be stuck. Not able to get to work without begging my coworkers for a ride or whatever. I guess I could rent. Might be worth a shot just to see how much I could sell it for.

[Phx_Dem]

27. For now you could compare

what a dealer offers you in trade in value vs. what retail price edmunds yahoo etc. comes up with. If you have not looked up the value using an online service you should, edmunds and yahoo are both free. You can go to a dealer and get a trade in price pretty quickly, though they will say it's preliminary and contingent on a more thorough examination or something like that, but they do do it without involving a sales pitch.

The general rule with down payments is that if you have very good to excellent credit a down payment is not going to get you a better rate, but if your credit is lower than that the down payment can make a huge difference in rates. My guess is that the lien holder feels much more secure knowing that your loan is in line with what the car is worth. If you want to put money down to lower your mo. payment thats a different issue based on what's best for your finances.

Depending on a lot of factors like you cars condition and how large of a metro area you live in, you might be able to sell it pretty quickly. Once you know what car you want you can start negotiating after you post an ad. when I started shopping for my truck for example, a dealer told me that they would give me $4500 for my corolla, I posted a free add in yahoo and sold it in 7 days for $7500. I didn't buy the truck until I had cash in hand from the car, the salespeople would no doubt feel better if you buy their product 10 seconds after hitting the lot, but they will negotiate with you over a period of days if that's what you need.

[benEzra]

16. Why is a Mazda 3 impractical?

It's roughly as big as the second-generation Camry (I used to have an '87 Camry, loved it), and it has the same underpinnings as the Volvo S40 and the European Ford Focus (not the American one, sadly). My dream car is an S40T5...

Do you routinely carry stuff big enough that it won't fit in a 4-door sedan with a pass-thru trunk (or a hatchback, if you go that route)? A kayak can be carried on a roof rack, and will probably be easier to get on and off the roof of a sedan than a taller SUV.

The 3 will get better mileage, too...

[alarimer]

26. It isn't impractical really.

I have just been weighing the pluses and minuses. One of the minuses on any car is the low clearance. I can take my truck (even though it's 2wd) in places I could never get a car in. Some of the launch sites (actually only one that I use regularly) are impossible unless you have fairly high clearance. But the other places I go aren't like that. You can drive any car on the beach around here as long as you don't try to drive all the way down Padre Island. So I'm not sure that is much of an issue. And you are right about the gas mileage. A big draw of these smaller hatchbacks is the improved gas mileage.

In addition, almost all the vehicles these days have an antenna in the middle of the roof, in the back. How that impacts a roof rack I don't know. But on the Toyota Matrix it is very flexible so it probably not a big deal after all.